Consumer Finance Litigation

In U.S. BANK NATIONAL ASSOCIATION v. PATRICIA J. BARTRAM, et al., Case No. 5D12-3823, Florida's Fifth Circuit Court of Appeals added much needed clarity to the question of when a foreclosure action is time-barred by the applicable statute of limitations. As the height of Florida's foreclosure crisis gets further behind us, more and more lenders and loan servicers are finding themselves with foreclosure cases over five years old and wondering if the statute of limitations will present a problem. In some cases, borrowers are going on the offensive and asserting that such loans are not only time barred, but now invalid such that they should be cancelled or removed from title. In Bartram, the bank foreclosed in 2006 alleging a payment default in January of 2006. The foreclosure action was dismissed in May of 2011 after the plaintiff failed to appear at a case management conference. In 2011, Bartram filed a cross-claim in foreclosure action of a second mortgagee alleging tha the Bank's mortgage should be cancelled because the statute of limitations had expired on their 2006 claim. The trial court granted a summary judgment in favor of Bartram and cancelled the bank's mortgage. The Bank sought rehearing, which was denied, and then appealed. On appeal Bartram argued that because the bank had accelerated the loan in 2006 through its foreclosure action, the statute of limitations had run on each and every payment accelerated five years after the commencement of the now dismissed foreclosure action. The Fifth District Court of Appeal rejected Bartram's argument and reversed the trial court. The Fifth District Court of appeal relied heavily on Singleton v. Greymar Associates, 882 So. 2d 1004 (Fla. 2004), specifically the language in that opinion that "a mortgagor may prevail in a foreclosure action [and] . . . . [i]n those instances, the mortgagor and mortgagee are simply placed back in the same contractual relationship with the same continuing obligations." Therefore the Fifth District Court of Appeal held that "we conclude that a foreclosure action for default in payments occurring after the order of dismissal in the first foreclosure action is not barred by the statute of limitations found in section 95.11(2)(c), Florida Statutes, provided the subsequent foreclosure action on the subsequent defaults is brought within the limitations period." This opinion is sure to have a tremendous impact on the large number of loans languishing in limbo because of fears recovery on them is time barred. However, the devil remains in the details. Recognizing this, the Fifth District Court of Appeal certified the question of whether or not such claims are time barred to the Florida Supreme Court. However, in the absence of intra-district conflict or a conclusive treatment of the issue by the Florida Supreme Court, Bartram will be the go-to opinion for those looking to breath new life into old foreclosures.